Fiat and Chrysler join forces

The alliance, to be a key element of Chrysler's viability plan, will provide Chrysler with access to competitive, fuel-efficient vehicle platforms, engines and components to be produced at Chrysler manufacturing sites.

Fiat will also provide distribution capabilities in key growth markets, as well as substantial cost savings opportunities and management support services.

The alliance will also allow Fiat and Chrysler to take advantage of each other's distribution networks and to fully optimise their respective manufacturing footprint and global supplier base.

In return for Fiat's contribution to the alliance, Fiat will receive an initial 35% equity interest in Chrysler, although it will not be making a cash investment in Chrysler, nor is it committed to funding Chrysler in future.

“This initiative represents a key milestone in the rapidly changing landscape of the automotive sector and confirms Fiat and Chrysler commitment and determination to continue to play a significant role in this global process.

“The agreement will offer both companies opportunities to gain access to most relevant automotive markets with innovative and environmentally friendly product offering, a field in which Fiat is a recognised world leader while benefiting from additional cost synergies.

“The deal follows a number of targeted alliances and partnerships signed by the Fiat Group with leading carmakers and automotive suppliers over the last five years aimed at supporting the growth and volume aspirations of the partners involved,” the CEO of Fiat Group, Sergio Marchionne said.

"A Chrysler/Fiat partnership is a great fit as it creates the potential for a powerful, new global competitor, offering Chrysler a number of strategic benefits, including access to products that complement our current portfolio; a distribution network outside North America; and cost savings in design, engineering, manufacturing, purchasing and sales and marketing," said Bob Nardelli, Chairman and CEO of Chrysler.